Craft beer moving into the UK mainstream?

Posted by AFN Staff Writers on 13th January 2014
Is craft beer becoming 'mainstream' in the UK?

Following the introduction in the UK of the Small Breweries’ Relief Act in June 2002, there has been a boom in the number of UK breweries, and many are now moving the craft movement firmly up the consumer agenda according to market research organisation Mintel.

Proving this, a new report from Mintel has revealed that a quarter (25 per cent) of British adults — equating to some 13 million people — stated they had consumed a craft beer over the past six months.

As the segment develops and its popularity increases, Mintel said it is moving towards the overground and mainstream consumption. Craft beers have forged associations with high quality, so much so that over a third (35 per cent) of beer drinkers think they are worth paying more for.

Defining ‘craft’ could help further growth

Recent industry discussions on the segment have centred around the current lack of craft beer’s definition in the UK, or indeed whether such a definition is needed at all.

But this lack of clarity may be holding the category back, according to Mintel. While half (50 per cent) of beer drinkers said they expected craft beers to taste better, 40 per cent admitted they were unsure about what the term ‘craft’ actually meant. Educating consumers about the segment and what it stands for is important as 45 per cent of beer drinkers agreed that these beers would be moree appealing if they knew more about them.

Indeed, Mintel found that craft beer today appeared to be more about production methods andn quality than size, as 40 per cent of beer drinkers said they were interested in trying a craft-style beer from a large brewer.

“Far from being a niche area reserved for small brewers, craft beers are actually something which larger brewers can also tap into,” said Chris Wisson, Senior Drinks Analyst at Mintel. “While it was thought that the craft movement was going to be bad news for leading brewers, the fact that 40 per cent of beer drinkers would be interested in trying one from a large brewer proves that craft beer does not necessarily need to be limited to smaller operators,” he said.

“Rather than focusing on size, craft should be more of an ethos which stands for high quality and artisan skill, giving the consumer a different drinking experience,” Mr Wisson said.

Overall beer market in a ‘state of flux’

While the growth of craft beer is encouraging, the overall beer market continues to find itself in a state of flux. The amount of people drinking beer remained broadly the same in 2013 against the previous year – some 71 per cent of UK adults now drink beer and 63 per cent of beer drinkers claimed do so at least once a week.

However, the actual amount being consumed is decreasing in line with the overall fall in alcoholic drinks consumption. Despite the UK Government removing the beer tax escalator in March 2013, some 31 per cent of beer drinkers claim to be drinking less beer than they were a year ago, compared to just 13 per cent claiming to drink more. Volume sales also reflect this downturn, with volumes falling 3.4 per cent year on year to 2013 from 4.24 billion litres in 2012 to 4.09 billion in 2013.

Against this background, further volume declines are forecast in the market to 3.49 billion litres in 2018. Inflation and trading up to premium beers are expected to prop up value sales to a degree and the market is expected to reach £18.4 billion by 2018, rising from its current level of £16.7 billion.

This trend away from beer consumption has been seen in Australia too. In September 2013, Australian Food News reported that beer consumption in Australia was at a 66 year low.

Popularity by type

Lager was the most popular type of beer, drunk by 58 per cent of adults in the UK in the past six months, according to Mintel. It was the only type of beer to show significantly higher in-home usage than out of home (47 per cent against 31 per cent), reflecting the difference in the cost of drinking in the on- and off-trade.

Ale was also showing signs of growth – 31 per cent of adults said they now drink ale – as many cask and premium bottled ales are achieving reasonably encouraging growth. On the other hand, stout was struggling as many consumers gravitate towards ‘lighter’ drinks such as golden ales.

Another growing segment was the spirit beer category, drunk by just under one in five (18 per cent) adults. However, it seems that spirit beers may still have a way to go to convince beer drinkers overall as just 26 per cent claimed to find them appealing and a further 49 per cent said they think beer should be left unflavoured.

“The growth of craft beer taps into an overall trend of many beer drinkers becoming more demanding when it comes to the quality of their beer,” Mr Wisson said. “The fact that two thirds of them think that it is worth paying more for better quality beer goes some way to explaining why premium brands such as Peroni go from strength to strength despite their higher price,” he said.

As prices of many drinks continue to go up, many drinkers are looking for discernibly higher quality to justify the cost,” Mr Wisson said. “Focusing on the quality of ingredients such as hops and the brewing process should help brands to convey their superior quality to beer drinkers,” he said.